Calcineurin, a calmodulin-binding protein, dephosphorylates several phosphoproteins as well as phosphotyrosine and p-nitrophenyl phosphate. Some characteristics of the p-nitrophenyl phosphate activity of calcineurin purified from bovine brain were investigated. In standard assays with 100 mM substrate, 0.5 mM MnCl-2 and 0.8 mM CaCl-2, calmodulin increased phosphatase activity 150-300%. Activity was largely dependent on Mn2+; omission of Ca2+ decreased activity Less than 15% with or without Ca2+-free calmodulin, whereas omission of Mn2+ decreased activity Greater than 90%. When Ni2+ (1-10 mM) was substituted for Mn2+ activity was increased about 20%. However, with Mn2+ present, Ni2+ did not increase activity. The effect of calmodulin on calcineurin activity was dependent on substrate concentrations. Lineweaver-Burk plots were nonlinear with and without calmodulin. At p-nitrophenyl phosphate concentrations up to 50 mM, calmodulin increased maximal velocity and had little effect on apparent Km (about 30 mM); at greater than 50 mM substrate, calmodulin decreased the apparent Km but did not appreciably alter Vmax. With 0.1 MuM calcineurin, the same concentration of calmodulin produced maximal activation, indicating that the active complex is a heterotrimer. Calmodulin antagonists trifluoperazine, W-7, and W-5 inhibited calmodulin-dependent phosphatase activity; the concentrations required were 2-3 times those necessary for inhibition of calmodulin-dependent phosphodiesterase activity. Inhibition of basal and calmodulin-dependent phosphatase activity by orthovanadate (Ki 0.5 muM) is consistent with other evidence that calcineurin may be a phosphotyrosyl-protein phosphatase. Dimethylsulfoxide (30%) increased activity 100% above that observed with maximal calmodulin activation. Thus, calmodulin, at least under the assay conditions employed, apparently does not permit full expression of catalytic activity.